News:

"There is a terrible desperation to the increasingly pathetic rationalizations from the climate denial camp. This comes as no surprise if you take the long view; every single undone paradigm in history has died kicking and screaming, and our current petroleum paradigm 🐉🦕🦖 is no different. The trick here is trying to figure out how we all make it to the new ⚡ paradigm without dying ☠️ right along with the old one, kicking, screaming or otherwise." - William Rivers Pitt

On today's episode of "In Depth" Zac and Jesse talk about The Impending Big Auto/Oil Implosion! Please consider supporting us on Patreon. We have some pledge rewards you may be interested in, so go check that out. Now You Know! #Bigoil #EVs #NowYouKnow

Shortly after reading Tina Casey’s CleanTechnica article, “New Report Outlines Investor Risk of Supporting Coal Power,” I found myself looking at the November edition of the EIA’s Monthly Energy Review. Of course, I found myself connecting the two.

As natural gas has taken market share from coal-powered electric generation, it has pushed emissions from coal down. But the EIA document shows that natural gas is emitting carbon dioxide at a record level, and, sadly, its own levels of emissions seem to be increasing faster than those of coal are dropping. As I looked at information on carbon dioxide emissions, I found myself wondering how long it will take for the natural gas industry to go into its own steep decline.

The answer to this question may be becoming clear, and rather quickly. There has been a series of developments in California that anyone interested should notice.

The underlying context is a general switch to renewable energy that has been going on there for many years. As wind and solar systems have been added to the system, prices for electricity from renewable systems have declined. They have pushed down wholesale power prices in the state, especially those of peak demand times, when prices have been highest.

As the cost of renewable power has declined, however, the cost of electricity from fossil fuel plants has held rather steady. As can be seen in Lazard’s Levelized Cost of Energy Analysis, Version 12.0[, the costs of renewably-sourced electricity have generally fallen so that they are often below those of coal-burning and gas-burning plants. And the fossil fuel plants have seen their profits disappear with more powerful competition.

Metcalf Energy Center (MEC) in California

Now we come to a specific example of unfolding events that is particularly revealing. In 2005, Calpine Corporation brought a new gas-burning combined-cycle plant online at the Metcalf Energy Center (MEC) in California. A brief history of the plant can be found at Wikipedia. As a combined-cycle plant, it was of the type that generally produces the least expensive power available from fossil fuels.

By 2017, the MEC was finding market conditions difficult. In June of that year, Calpine notified the California Independent System Operator that the plant would have to run on a reliability-must-run basis, or it would be shut down because it was losing money. Calpine🦕 wanted to keep the plant open and was requesting extra income, to be charged in the end to ratepayers. 😈 To do this, it would require a special license from the Federal Energy Regulatory Commission, to be renewed annually.

In November of 2017, the California Public Utility Commission (CPUC) authorized Pacific Gas and Electric (PG&E) to look for a less expensive source of electricity that could replace the MEC’s gas plant. Thereupon, PG&E made a procurement request for that electric power. And in the first weeks of last summer, PG&E announced that it had requested approval from the CPUC for a specific solution to reducing customer costs.

That solution included four battery systems, two of which would be much larger than the 100-MW / 127-MWh Hornsdale Power Reserve (HPR) in South Australia, currently the largest battery in the world. A posting of July 3 at Utility Dive said the total energy storage capacity of the project would be 2,270 MWh, almost eighteen times that of the HRP.

In November, the CPUC approved the battery system. It is expected to be the largest battery system in the world. 👀 An article at Commercial Property Executive details this.

While all of the four batteries are huge, the largest is just about mind-boggling all by itself. Vistra Energy is set to produce and own a battery of 300 MW / 1,200 MWh, three times the power capacity and nearly ten times the energy storage capacity of HPR. To this will be added a battery of 182.5 MW / 730 MWh, to be produced by Tesla but to be owned by PG&E. The smaller batteries are systems of 75 MW and 10 MW, whose specifications called for four hours of storage each.

What I find most interesting about this is not the record-setting sizes of the battery systems. It is that a relatively new fossil fuel plant, of a design that produces the least expensive electricity we can get from combustion, is being replaced by batteries, which do not generate electricity but just store it as it comes from the wind and sun. A gas plant is being put out of business by lithium-ion batteries, because the energy storage costs, combined with the cost of the electricity from solar and wind plants, are more attractive than the cost of the least expensive fossil fuels.

The Utility Dive article cited above had a quote in it from Alex Eller, a senior energy research analyst at Navigant. He said, “Storage at this scale is likely now cheaper than the total cost to run the gas plants.” More natural gas plants may be coming online, but they look destined to be the next round of stranded assets.

We are not talking about some day in the future here. Renewablesare pushing gas🦕 out already.

The only upside to this use of Renewable Energy by the Hydrocarbon 🦕🦖 Hellspawn is that their argument, for the last century or so, that "Fossil Fuel sourced Energy is cheaper than Renewable Energy" is (and always was, by the way,but they did not admit it), KAPUT.

• There is a very short window of time to get out of pure-play oil & gas company investments without substantial losses. It is imperative to sell them now.

• It is already too late to get out of pure-play coal company investments without substantial losses. But they will lose even more money going forward.

• Utility companies which have a heavy reliance on fossil fuels are also in trouble.Diversified companies will lose money on their coal, oil, and gas portfolios, although this may not be significant enough to warrant getting out of a diversified company.

• It will remain possible to do short-term swing trading in coal, oil, and gas companies with no future, but this is inappropriately risky behavior for a conservative investor.

The massive 129 kWh Tesla Powerpack installation in South Australia has already been having a strong impact on the region’s electricity markets, saving grid operator Neoen and customers an estimated $25 million, or just over ⅓ of the purchase price, in its first year of operation.

As the regional grid continues to adjust to the impact of a new energy storage block of this size, we are already starting to see some of the side effects of the world’s largest lithium-ion grid-scale battery. Namely, the battery, called the Hornsdale Power Reserve, is putting the squeeze on natural gas peaker plants in the region.

Peaker plants are smaller natural gas–fired electricity generating units (EGUs) that are idled for the vast majority of their lives. For those rare periods when the grid needs a bit of extra juice to meet customer demand, the peakers are fired up. That’s all fine and good, but their intermittent nature makes peaker plants extremely inefficient to operate and extremely polluting, as the startup and shutdown segments of a ntural gas turbine’s operation (when the engine gets warmed up or idles down) are by far the dirtiest.

After watching the operation of the battery ⚡ 💫 closely for its first year in operation, the Australian Energy Market Operator (AEMO) informed operators in the regional energy market that it would be putting an end to “the three-year-old requirement for 35MW of local regulation frequency and ancillary services to be provided in South Australia when there was risk of the state’s grid separating from the rest of the national grid,” according to Renew Economy.

“The operation of SA has changed significantly over the past 12 months,” AEMO shared in a written statement. “Synchronous unit requirements (for SA system strength) and the installation of the Hornsdale battery have ensured regulation FCAS is more readily available post-islanding of SA. Hence this requirement is no longer considered necessary.”

The major shift enacted by the large battery is that it removed the ability for natural gas–fired generation to game the market and took over that role itself.

The result of a competing on-demand electricity supplier entering the market was the immediate dilution of the tactics of the natural gas industry, which previously had a de facto monopoly on the local backup market. These gas companies almost entirely leveraged their control to ensure that the price of electricity rose to the market cap price of a staggering $14,000 per megawatt-hour whenever a call for backup power was made.

With the natural gas monopoly washed out, AEMO is realizing a much more stable market, as Tesla’s new battery installation responds to needs of the grid whenever more production is needed. This isn’t some do-gooder installation, but simply a response to a market that had been gamed to the point of making a business case for the world’s largest battery installation.

The good news … or the bad news, depending on how you look at it, is that these situations exist all over the world, to varying degrees. That is the lucrative new market Tesla is racing to gobble up, with battery production and procurement capacity as its sole constraint. Nearly all of Tesla’s batteries from Gigafactory 1 in Nevada went to the production of the Tesla Model 3, forcing the world’s largest battery producer to purchase even more batteries from external suppliers LG and Samsung for its larger energy storage products.

“Hornsdale has had a significant impact on the South Australia system,” Christian Schaefer, AEMO’s head of system capability shared, “and we have got new batteries coming on line with Victoria and South Australia.” While Tesla was the provider at Hornsdale, this improvement is not a Tesla thing — it’s a grid-scale battery thing and Tesla just happens to be the leader in the space.

Its Tesla Grid Controller, which was piloted at Tesla’s installation on the island of Samoa, pushes its Powerpack battery tech to the next level by adding another layer of intelligence that allows it to act as the brain for an entire island grid. This is achieved by more effectively and efficiently balancing energy generation — from solar, hydro, and traditional sources — as well as energy storage in the form of batteries and hydro with electrical demand from customers.

The electrical grid is the most complex machine humans have ever built, and watching grid-scale batteries flip these markets upside down in a matter of a few months while driving emissions down at the same time is both exhilarating and a bit nerve wracking. Thankfully, they’re paying out and proving themselves in increasingly larger installations around the world.

Posted by: AGelbert

Senator Jeff Merkley (D-OR) introduced a bill last week that would create a new option for federal employees to put their retirement savings in funds that are free from investment in fossil fuel companies.

The Retirement Investments for a Sustainable Economy (RISE) Act (S.3424) would create a “Climate Choice” stock option under the Thrift Savings Plan (TSP). While the TSP currently offers investors options for the amount and risk allocation of their TSP accounts, it does not offer federal employees control over the types of industries in which their money is invested.

“As climate chaos ramps up, all Americans deserve the option to divest from the fossil fuel industry,” said Merkley. “For the first time, this bill will give millions of federal employees the power to ensure their retirement funds are invested in a more sustainable, socially responsible investment portfolio.”

The RISE Act mandates a report within one year from the Government Accountability Office (GAO) examining the risk for investors from TSP holdings in fossil fuel companies 🐉🦕🦖 given policies to keep average global temperature increases to 2º Celsius. The RISE Act also directs the GAO to provide a divestment mechanism for the TSP should the report show risk to investors from fossil fuel🦕🦖👹 holdings.

Posted by: AGelbert

With fracking about to recommence in the UK after 8 years, social entrepreneur and writer Jeremy Leggett reviews the short but troubled history of fracking in the US. In a devastating slide presentation, he pictures the shale gas industry as a dirty, multi-hundred-billion-dollar doomed-to-burst debt bubble. And he predicts a similar fiasco in the UK. Courtesy Future Today.

History of oil and gas production from shale in pictures and charts: Why American shale is heading for a crash and fracking in the UK is doomed to costly failure

1. History of oil and gas production from shale in pictures and charts Why American shale is heading for a crash and fracking in the UK is doomed to costly failure Jeremy Leggett

2. Preface This is a presentation based on the Future Today chronology of selected developments in climate, energy, tech and the future of civilization: www.jeremyleggett.net The powerpoint version includes source urls as notes, and is available free for any use, by anybody, at https://drive.google.com/drive/folders/1pJlLMT57QZbUP0ZjWf5RMrexzDuanaC2 I know something about this subject not just because of my fear of climate change and passion for the energy transition, but from the research work I did for more than a decade in my first career….

3. A paper in the Journal of The Geological Society analyses widespread shale rocks in the UK 7th Jan 2016 Apr 1980 I researched shale and related rocks while on the faculty at Imperial College (1978 – 1989), funded among others by BP and Shell.

4. At first pass, the reversal of US gas and oil production after fracking of shale began in earnest around 2007-8 looks like a modern industrial miracle

9. But meanwhile there are some inconvenient truths concerning the economics

10. The US shale oil and gas business hasn’t funded itself at any oil price in any year since the beginning 7th Jan 2016 27th Dec 2017 Even at $100 oil prices in 2012 and 2013, the 33 companies spent more money producing shale energy than they made from operations. 33 shale-weighted E&P companies in the 4 main shale oil plays: Free cash flow Source: Bloomberg

11. 7th Jan 2016 6th Feb 2018 The US shale boom has been “a Ponzi scheme since day one”, doomed to collapse as fast as it has grown So argues @SRSroccoReport, based on the buildup of debt as evidenced in data collated e.g. by the Financial Times as above.

12. Even at the relatively high oil prices of 2017 fracked shale oil is a marginally profitable business at best 7th Jan 2016 3rd Mar 2018 Capex v cash from operations based on 10K full 2017 filings

13. Accounts of the main US exploration & production companies show 73% of them are losing money 7th Jan 2016 3rd Mar 2018 Capex v cash from operations based on 10K full 2017 filings

18. There have been clear warnings about the debt mountain from early on in the shale story, and all the way through it ….in this respect the shale debt bubble is unlike the mortgage-backed securities debt bubble that built up before the credit crunch of 2007 and financial crisis of 2008 (In some of the pictures and charts that follow, the oil price of the day [Brent crude] is in yellow)

20. “The Shale Industry Could Be Swallowed By Its Own Debt” 17th Jun 2015 $60 “Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank.”

21. “Oil price plunge sparks bankruptcy concerns” 11th Jan 2016 $29 Long-term debt for 134 public oil exploration and production companies in the US and Canada. 2015 figure is through December 17th.

22. Both trains and drillers are increasingly getting burned in the shale boom “BHP writes down US shale assets by $7.2bn” 15th Jan 2016 $28

24. “It will take more than an oil price rally to restart the US shale boom” 10th Feb 2016 $30 "It’s not really like just turning on the light switch." Bill Thomas, chief executive EOG Resources Reasons include cannibalization and degradation of idled equipment, workers relocating to growth sectors such as solar.

26. The industry is innovating its costs down constantly: global average oil breakeven cost is now at $51 7th Jan 2016 13th July 2016 $44 This is down $19 since 2014, and shale costs are among the lowest. But it is not enough to reverse the buildup of the debt mountain.

29. 7th Jan 2016 1st June 2017 $50 Michael Bloomberg: US cities, states and businesses will still meet Paris targets “The Global Oil & Gas Industry Is Cannibalizing Itself To Stay Alive” 75% of operating cash flow just to pay interest The Debt Wall Amount of bonds below investment grade that the US energy companies need to pay back each year

30. Oil and gas extraction has been the least profitable US industry over the last year 7th Jan 2016 24th Sep 2017 $58 Negative net profit averaging almost 7% over the 12 months to end July.

31. 20th Apr 2017 2 of the 3 main US shale oil production plays have peaked ….meaning much now rides on the Permian

33. “Has the US shale drilling revolution peaked?” 7th Jan 2016 18th Oct 2017 $58 Rather inconvenient if so, because production must be maintained for a long time, at high oil prices, in order to service / reduce the debt wall.

34. Shale gas represents 64% of US dry gas production: the US economy can ill afford any kind of collapse 7th Jan 2016 2nd Mar 2018 $64 Much depends on the Marcellus Shale (mostly in Pennsylvania), which provides 38% of shale gas production and 24% of US gas production.

37. Fast shale-well depletion means “the oil and gas infrastructure bubble is over”: John Dizard in the FT 7th Jan 2016 13th Apr 2018 Investors’ dilemma: “No matter how many years’ service the pipes and plants could provide, there will not be the production to fill them.”

38. “Shale Industry Drills More Debt Than Profit”: DeSmogBlog launches series on $280 bn debt pile 7th Jan 2016 18th Apr 2018 “The American oil and gas boom spurred by fracking innovations may be one of the largest money-losing endeavors in the nation's history.”

39. e.g. EOG Resources: $1.1 bn loss in 2016. Would have lost $0.7 bn in 2017 but for GOP tax handout of $2.2 bn. It is still $6bn in debt. US fracking companies tipped from yet more debt to profit by Trump tax law change at end of 2016 7th Jan 2016 26th Apr 2018

41. Unprofitability of fracking means the industry must keep borrowing new debt to pay back existing debt: “…the very definition of a Ponzi Scheme.” “How Lousy Shale Economics Will Pull Down The U.S. Economy”: SRSrocco Report 7th Jan 2016 18th May 2018 $78 Future Today 2015 2016 2017 • Plotting production decline by year of first flow shows just how fast the decline rates are • This plot is of the Permian, the biggest oil basin, showing e.g. 60% decline in 2 years from beginning 2016 to end 2017 (red circles) • Replacing that decline requires taking on another massive increment of debt to bankroll new production 1 2 million barrels / day 1.5 0.5

42. To keep production ahead of such decline, most companies are piling on debt even at current oil prices. Cash flow in top 10 Q1 2018: - $455 m. 7th Jan 2016 25th July 2018 $73 Decline rate in the top US shale oilfields has steadily increased to half a million barrels per day now

43. As though this state of play were not bad enough, some shale players have demonstrably inflated share prices fraudulently. If this tendency proves to be as widespread as some fear, the shale-debt crisis could end up worse than summarized here

49. EIA revises down its estimate of oil recoverable in the Monterrey Shale of California by, ahem, 96% 7th Jan 2016 21st May 2014 Monterrey lauded in 2011 as a 13 bn barrel resource: 66% of US shale oil supply. Rather more media coverage of that story than this one.

50. 7th Jan 2016 5th Feb 2018 EIA 2017 shale oil projection “highly to extremely optimistic, and are very unlikely to be realized”: PCI $ hundreds of billions in debt to do this much $7.7 trillion needed to drill 1.29 million wells in EIA’s projected production Source:DavidHughes,PostCarbonInstitute

55. Long awaited EPA study concludes that fracking does contaminate US drinking water[/size] 7th Jan 2016 5th June 2016 Both the oil and gas industry and the Environmental Protection Agency had insisted that it did not until this report.

56. 7th Jan 2016 1st Aug 2017 “As the oil patch demands more water, West Texas fights over a scarce resource” Water companies are mining aquifers Farmers and others are preparing to sue

57. Exposure to intense shale gas operations correlates with higher risk of asthma attacks, researchers find 7th Jan 2016 18th July 2016 Study began in 2012 on medical records of >400,000 residents. Finds increase in severity of asthma in those exposed to most active wells.

58. 7th Jan 2016 27th Jan 2013 So much gas is being flared from US shale fracking for oil that it can easily be seen from space Bakken Shale Minnesota St Paul `Chicago Enough gas wasted to power all the homes in Chicago and Washington DC combined

59. 7th Jan 2016 18th July 2018 If the the gas burnt globally in flares were captured and used for power generation, it could supply 90% of Africa’s electricity consumption. Global gas flaring dropped slightly in 2017, but rose 7% in the US because of fracked shale oil

60. The core oil and gas climate argument is that burning gas is less bad for global warming than burning coal

76. 7th Jan 2016 7th Jan 2018 Growth of Shell’s oil and gas operations in the next decade will depend on shale production: CEO With “a little bit of help from the oil price going up, we now see that we can significantly accelerate investment into this opportunity.”

77. Shell to bet billions on US shale by bidding for retreating loss maker BHP's shale division 7th Jan 2016 8th Mar 2018 The Charge of The Light Brigade A $10 billion offer, jointly with US private equity group Blackstone.

78. 7th Jan 2016 1st Aug 2013 Shell writes off $2 billion in shale The idea of a shale revolution spreading from the US across the world is “a little bit overhyped,” says CEO Peter Voser.

79. 7th Jan 2016 3rd Oct 2016 “Big oil should exercise capital discipline as prices rise” …& appoint a Head of Memory So says Paul Spedding, ex Global Co-Head of Oil And Gas Research at HSBC, now an advisor to Carbon Tracker

80. Beating Shell and Chevron to the 4.5 billion barrels of oil-equivalent resources, BP CEO Bob Dudley calls it a “transformational acquisition.” 7th Jan 2016 26th July 2018 BP heads into US shale oil and gas by buying BHP's assets - up for sale nearly a year - for $10.5bn

82. 7th Jan 2016 31st Oct 2017 Gas firms spend €104m on lobbying in 2016 to keep Europe hooked on fossil fuel 30x more than groups lobbying for a fossil-fuel-free future. 460 meetings with just two relevant EU Commissioners in 2.5 years.

83. With one exception, it looks as though the rest of the world fears the downsides of shale enough not try and copy the Americans

84. 7th Jan 2016 2nd June 2016 Scottish parliament bans fracking

85. 7th Jan 2016 24th June 2016 Germany bans fracking 👍

86. 7th Jan 2016 30th Aug 2016 Victoria becomes first Australian state to permanently ban fracking and coal seam gas 👍 “It is clear that the Victorian community has spoken. They simply don’t support fracking”: State government spokesperson

87. France bans fracking and oil extraction in all of its territories 7th Jan 2016 20th Dec 2017 • 👍 President Macron says he wants to lead the world in race for renewables • Lawmakers hope the ban will be “contagious”

94. UK Secretary of State for Energy and Climate: “Our country needs shale gas, so let’s go get it” 7th Jan 2016 9th Aug 2015 Amber Rudd: “A responsible, long-term energy policy demands a willingness to take decisions today for the good of tomorrow.”

95. “Britain's shale fracking revolution comes with big risks” 7th Jan 2016 18th Aug 2015 Andrew Critchlow: “Get it wrong and fracking in Britain…will become too politically toxic for any future government to consider. “ There would be rather a lot of these on English country lanes, carrying water, sand, and toxic frack fluids in to well pads, and waste fluid plus (maybe) oil and gas out

96. Fracking gets go-ahead in UK for first time since 2011, despite 4,000 objections to planning enquiry 7th Jan 2016 23rd May 2016 FT Lex: “The cult following still believes that fracking in the UK could be profitable. Investors should allow market forces to finally kill it off.”

98. 7th Jan 2016 27th Oct 2016 Latest UK poll suggests only 17% support fracking (while 79% support renewables) These companies are joined by the Conservative government in running the gauntlet of such huge public opposition, which must be multi-party.

100. Ineos shale drilling application rejected: that makes 7 out of 8 shale drilling plans rejected in 2018 7th Jan 2016 8th Mar 2018 It now takes on average 58 weeks to (maybe) get a planning decision on the drilling of a vertical well, up from 13 weeks 5 years ago.

101. UK's first horizontal well completed in Lancashire shale, Caudrilla reports 7th Jan 2016 3rd Apr 2018 The driller now waits for government approval to conduct what would be the first frack since 2011. (The one that led to an earthquake).

102. 7th Jan 2016 19th July 2018 …and no payments for solar electricity exports – a huge blow to the homeowner and community solar that competes with shale gas. HMG proposes, on the same day, no need for frackers to seek planning permission henceforth….

103. Cuadrilla given the go-ahead to start fracking in Lancashire by energy minister 7th Jan 2016 24th July 2018 Claire Perry: “Our world-class regulations will ensure that shale exploration will maintain robust environmental standards and meet the expectations of local communities.” be derided

104. Letter to O&G companies: major hydrocarbon releases “remain a concern because of their greater potential to lead to fires, explosions and multiple losses of life. There have been several such releases in recent years that have come perilously close to disaster.” Offshore UK OGI “perilously close to disasters” as a result of neglected gas leakage, HSE warns 7th Jan 2016 26th Apr 2018

105. The Air Quality Expert Group (AQEG) report is eventually quietly published 3 days after Caudrilla gets clearance to frack in Yorkshire. 7th Jan 2016 2nd Aug 2018 Report finding that fracking increases air pollution buried for 3 years by UK government 40,000 premature deaths a year linked to air pollution HMG has just decided its OK for that figure to be higher

106. University of London cardiologists find exposure to nitrogen dioxide and PM2.5 and PM10 particles linked to an increase in the size of ventricles. 7th Jan 2016 3rd Aug 2018 Air pollution linked to changes in structure of the heart of the sort seen in early stages of heart failure

107. And there is no reason to expect the economics of shale drilling in the UK to be any less disastrous than in the US In fact, drilling costs should be higher in the UK, because we have “world class regulations” and the Americans have virtually none under a Trump EPA Plus….

109. Offshore wind will provide most of the growth from 2017 to 2025, WWF suggest, but HMG could & should also use onshore wind and solar. UK on track to phase-out coal by 2025 without the need for any new large gas plants: WWF report 7th Jan 2016 13th May 2018 Masayoshi Son, Softbank founder and CEO

110. Some conclusions

111. In the USA, the sadly numerous real-life oil-train wrecks are an allegory for the entire shale story: the debt mountain means this train is going to come off the tracks

112. It’s impossible to foresee when …but unlikely to be more than a few years

113. In the UK, the train is most unlikely to make it properly on to the tracks: polls, disruption, and mad economics suggest that too many conservative rural voters will be prepared to fight very hard indeed to stop it happening

114. In the UK, the train is most unlikely to make it properly onto the tracks: too many rural Conservative voters will be prepared to die in a ditch to stop it happening The energy-policy, economic, environmental and societal implications of these conclusions will be examined further in forthcoming blog-slideshows on the Future Today website: www.jeremyleggett.net

Posted by: AGelbert

Siemens is considering the sale of its struggling business that produces gas turbines for power plants, according to people familiar with the matter, report Oliver Sachgau and Eyk Henning for Bloomberg. But a final decision has not yet been made, and the company could end up weathering a downturn and keeping the business that has suffered from a collapse in orders as the global energy industry shifts to renewable sources like wind and solar and away from large-scale power plants that run on fossil fuels, according to the report.

Posted by: AGelbert

By Jim Efstathiou Jr. (Bloomberg) — Massive offshore wind turbines keep getting bigger, and that’s helping make the power cheaper — to the point where developers say new projects in U.S. waters can compete with natural gas.

The price “is going to be a real eye-opener,” said Bryan Martin, chairman of Deepwater Wind LLC, which won an auction in May to build a 400-megawatt wind farm southeast of Rhode Island.

Deepwater built the only U.S. offshore wind farm, a 30-megawatt project that was completed south of Block Island in 2016. The company’s bid was selected by Rhode Island the same day that Massachusetts picked Vineyard Wind to build an 800-megawatt wind farm in the same area.

Bigger turbines that make more electricity have cut the cost per megawatt by about half, said Tom Harries, a wind analyst at Bloomberg New Energy Finance. That also reduces maintenance expenses and installation time. All of this is helping offshore wind vie with conventional power plants.

“You could not build a thermal gas plant in New England for the price of the wind bids in Massachusetts and Rhode Island,” Martin said Friday at the U.S. Offshore Wind Conference in Boston. “It’s very cost-effective for consumers.”

Posted by: AGelbert

Agelbert NOTE: This article answers the question that has ALWAYS been in the category of "Do wild bears poop in the woods".

Can we get 100% of our energy from renewable sources?

By Michelle Froese | May 18, 2018

This article comes from Science Daily, with materials provided by Lappeenranta University of Technology.

Scientists have demonstrated that there are no roadblocks on the way to a 100% renewable future.✨

֍ Is there enough space for all the wind turbines and solar panels to provide all our energy needs?

֍ What happens when the sun doesn’t shine and the wind doesn’t blow?🤔

֍ Won’t renewables destabilize the grid and cause blackouts?

In a review paper last year in the high-ranking journal Renewable and Sustainable Energy Reviews, Master of Science Benjamin Heard 🐉 and colleagues 🦕 🦖 presented their case against 100% renewable electricity systems. They doubted the feasibility of many of the recent scenarios for high shares of renewable energy, questioning everything from whether renewables-based systems can survive extreme weather events with low sun and low wind, to the ability to keep the grid stable with so much variable generation.

Now scientists have hit back with their response to the points raised by Heard and colleagues. The researchers from the Karlsruhe Institute of Technology, the South African Council for Scientific and Industrial Research, Lappeenranta University of Technology, Delft University of Technology and Aalborg University have analysed hundreds of studies from across the scientific literature to answer each of the apparent issues.

They demonstrate that there are no roadblocks on the way to a 100% renewable future.

“While several of the issues raised by the Heard paper are important, you have to realise that there are technical solutions to all the points they raised, using today’s technology,” says the lead author of the response, Dr. Tom Brown of the Karlsruhe Institute of Technology.

Quote

“Furthermore, these solutions are absolutely affordable, especially given the sinking costs of wind and solar power,” adds Professor Christian Breyer of Lappeenranta University of Technology, who co-authored the response.

Brown cites the worst-case solution of hydrogen or synthetic gas produced with renewable electricity for times when imports, hydroelectricity, batteries, and other storage fail to bridge the gap during low wind and solar periods during the winter. For maintaining stability there is a series of technical solutions, from rotating grid stabilisers to newer electronics-based solutions.

The scientists have collected examples of best practice by grid operators from across the world, from Denmark to Tasmania.

Furthermore, these solutions are absolutely affordable, especially given the sinking costs of wind and solar power.

The response by the scientistshas now appeared in the same journal as the original article by Heard and colleagues.

“There are some persistent myths that 100% renewable systems are not possible,” says Professor Brian Vad Mathiesen of Aalborg University, who is a co-author of the response. “Our contribution deals with these mythsone-by-one, using all the latest research. Now let’s get back to the business of modeling low-cost scenarios to eliminate fossil fuels from our energy system, so we can tackle the climate and health challenges they pose.”

Posted by: AGelbert

When an electric energy pioneer like General Electric (NYSE: GE) reconfigures its entire energy business, investors should take note. That's exactly what happened last week when GE Power announced it would cut 12,000 jobs, or 18% of the division's workforce, reducing the company's exposure to traditional power plants.

What wasn't affected was GE's staffing or investments in renewable energy and energy storage. In fact, these emerging energy assets are what's disrupting fossil fuels more broadly. GE has made the first step to reducing exposure to fossil fuels -- now the question may be "What's next?"

Coal power plant with smoke coming from smoke stacks. (picture at link)

Coal power plants like this one are being shut down by the hundreds, forcing GE to cut back on its power plant business. Image source: Getty Images.

What GE's layoffs tell us

As part of a plan to cut $1 billion in structural costs at GE Power, there will be about 12,000 positions eliminated up and down the business. Weak fundamentals in the power plant business overall were the drivers of the move, with the press release saying:

Traditional power markets including gas and coal have softened. Volumes are down significantly in products and services driven by overcapacity, lower utilization, fewer outages, an increase in steam plant retirements, and overall growth in renewables. GE Power is right-sizing the business for these realities and is focused on improving operational excellence and reducing its footprint and structure, which will help drive significant improvements in cash flows and margins.

Notice that growth in renewables was given as a reason for the reduction in GE's power business. As wind and solar energy have come down in cost, they've replaced traditional coal and natural gas power plants as the fuel of choice for new power plants around the world.And there's no reason that's going to change. What's unclear is if GE is going to transition from the dying fossil fuel business to the growing renewable energy business.

Is GE taking renewables seriously?

If GE is hoping to play a meaningful role in renewable energy in the future it's going to have to take the industry more seriously. GE sold its thin-film solar business to First Solar (NASDAQ: FSLR) in 2013, largely exiting the solar market. In wind, GE is a market leader in turbines, but pricing pressure has compressed margins for the industry as a whole. Energy storage is the third leg of renewable energy disruption, and GE hasn't made a meaningful play in the industry so far, ceding market share to AES (NYSE: AES), Siemens, and Tesla (NASDAQ: TSLA).

The only segment where GE seems to have taken renewable energy seriously is financing. The company has financed $5 billion of projects over the last three years. But that level of investment isn't going to drive earnings for a $153 billion company.

To take renewable energy seriously, I think GE needs to start putting its balance sheet to work, scooping up assets and developing projects around the world. Buying First Solar or SunPower (NASDAQ: SPWR) would make sense, although SunPower is majority owned by Total (NYSE: TOT) today. With SunPower, in particular, it could invest in the manufacturing scale necessary to become profitable and increase market share to become a top-3 manufacturer.

Posted by: AGelbert

By Mikael Holter (Bloomberg) — Can Norway dump $35 billion in oil and gas investments, and simultaneously convince that same industry to throw money into the country’s own fossil-fuel future?

After the initial shock of learning that Norway’s $1 trillion wealth fund wants nothing to do with it, the petroleum industry says both are in fact possible.

But the mood is shifting. While the fund said its proposal is about spreading risk and doesn’t imply a negative outlook on the oil industry, the plan reverberated as a nod from western Europe’s biggest oil producer to the uncertain future facing oil.

SNIPPET 2:

Confident Lobby

The proposal needs approval from Norway’s government and possibly even Parliament. Crucially, it has no bearing on the terms offered to oil companies operating offshore Norway, said both Industry Energy and the Norwegian Oil and Gas Association , a lobby group for companies such as Royal Dutch S , Total SA and Exxon Mobil Corp. — all companies that could be dropped by Norway’s wealth fund if the proposal is implemented.

Posted by: AGelbert

By Sveinung Sleire (Bloomberg) — The $1 trillion fund that Norway has amassed pumping oil and gas over two decades wants out of energy stocks.

Norway, which relies on oil and gas for a fifth of economic output, would be less vulnerable to declining crude prices without investments in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world’s biggest wealth fund of climate risk, after it sold most of its coal stocks.

“Our perspective here is to spread the risks for the state’s wealth,” Egil Matsen, the deputy central banker overseeing the fund, said in an interview in Oslo. “We can do that better by not adding oil-price risk.”

The plan would entail the fund, which controls about 1.5 percent of global stocks, dumping as much as $40 billion of shares in international giants such as Exxon Mobil Corp. and Royal Dutch Shell Plc. The Finance Ministry said it will study the proposal and decide what to do in “fall of 2018” at the earliest.

Posted by: AGelbert

Lazard is a global asset management company that tracks the cost of producing electricity, among other things. It uses a measure called the Levelized Cost of Energy (LCOE), which averages the estimated costs of construction, maintenance, and fuel for electricity generating assets over the number of megawatt-hours that each is expected to produce over its lifetime. In simple terms, it is one way of comparing different ways of making electricity to see which cost more and which cost less.

The move by the world’s biggest offshore-rig operator signals just how bleak the future looks for deepwater drilling. Pathfinder is the most famous of six floating rigs the company is scrapping in burials that will add up to a bruising $1.4 billion write-off. Competitors are going the same route, jettisoning more rigs in the third quarter than have ever been trashed in a 90-day stretch, according to Heikkinen Energy Advisors analyst David Smith.

That’s how bad it is, with predictions crude prices won’t go much higher than $60 a barrel in the next year compared with around $50 recently. “Deepwater is going to be playing a much-reduced role on the global oil-supply stage relative to what the industry expected as recently as three years ago,” said Thomas Curran, an analyst at FBR Capital Markets in New York.

For all that, it could have been worse, in one way, for Transocean. It has been the most aggressive in an unprecedented experiment with what’s called cold-stacking for big drillships. After oil prices cratered in 2014, the company didn’t send all of its unwanted rigs out to sea in the time-honored temporary holding pattern where engines keep running and a crew remains on board — something know as warm stacking, naturally, that runs up a daily bill of some $40,000. Instead, Transocean dropped anchor on nine high-tech ships 12 miles off the coast of Trinidad & Tobago and simply shut the motors off. So far the savings are in the neighborhood of $90 million.

New Generation

This hadn’t been tried before with the new generation of finely tuned, computer-driven giants never intended for long-term parking. Equipped with derricks towering 220 feet above the platform and able to drill in 10,000 feet of water, the vessels had been in demand since birth. The big question was whether one could be shut down so solidly and later switched back on at a reliable cost. (Rival Ensco Plc brought its DS-4 drillship back from cold stack, but it wasn’t mothballed as long as Transocean’s rigs and was tied to a dock, allowing it access to more auxiliary power while parked.)

With Pathfinder, and a cousin called the GSF Jack Ryan that’s also being scrapped after its Caribbean cold stacking, Transocean will never know for sure. The Vernier, Switzerland-based company declined to comment for this story.

Posted by: AGelbert

Agelbert NOTE: As you will learn, these floating drill rigs were previously cold stacked. That means they put them out of service HOPING to return them to service when oil prices "went up". Massive increases in Renewble Energy from both solar and wind has kept that from happening. The fact that these rigs will now be scrapped makes it crystal clear to an objective observer that Transocean fossil fuelers cannot figure out any way to make money out of them for the forseeable future (i.e. for at least 20 years - the average life of one of these floaters before scrapping). GOOD!

Transocean to Scrap Six Floaters from Fleet

September 22, 2017 by gCaptain

Sedco Express File photo

Transocean has announced its plan to scrap six deepwater and ultra-deepwater floating drilling rigs, aka “floaters”, as the offshore drilling company continues to shed older and less-competitive rigs from its fleet.

The floaters to be retired include the ultra-deepwater floaters GSF Jack Ryan, Sedco Energy, Sedco Express, Cajun Express, and Deepwater Pathfinder, and the deepwater floater Transocean Marianas. The rigs will be classified as held for sale and will be recycled in an environmentally responsible manner.

All six rigs were previously cold stacked.

Transocean says it will recognize an impairment charge of approximately $1.4 billion during the third quarter of 2017 as a result of the sale.

“We continue to enhance the quality of our fleet through the addition of new, high-specification assets, and the retirement of older, less competitive rigs,” said Jeremy Thigpen, President and Chief Executive Officer. “We remain committed to providing our customers with the most technically capable and highest quality ultra-deepwater and harsh environment assets in the industry, and will continue to objectively evaluate our rigs and high-grade our fleet as the market evolves.”

Following the retirement and sale of the six rigs, Transocean will own and operate a fleet of 38 mobile offshore drilling units consisting of 25 ultra-deepwater floaters, seven harsh environment floaters, two deepwater floaters and four midwater floaters.

Posted by: AGelbert

Electricity investment overtakes oil, gas for first time ever in 2016: IEA

PARIS (Reuters) - Investments in electricity surpassed those in oil and gas for the first time ever in 2016 on a spending splurge on renewable energy and power grids as the fall in crude prices led to deep cuts, the International Energy Agency (IEA) said on Tuesday.

Total energy investment fell for the second straight year by 12 percent to $1.7 trillion compared with 2015, the IEA said. Oil and gas investments plunged 26 percent to $650 billion, down by over a quarter in 2016, and electricity generation slipped 5 percent.

"The reaction of the oil and gas industry to the prolonged period of low oil prices which was a period of harsh investment cuts; and technological progress which is reducing investment costs in both renewable power and in oil and gas," he said.

Oil and gas investment is expected to rebound modestly by 3 percent in 2017, driven by a 53 percent upswing in U.S. shale, and spending in Russia and the Middle East, the IEA said in a report.

"The rapid ramp up of U.S. shale activities has triggered an increase of U.S. shale costs of 16 percent in 2017 after having almost halved from 2014-16," the report said.

The global electricity sector, however, was the largest recipient of energy investment in 2016 for the first time ever, overtaking oil, gas and coal combined, the report said.

"Robust investments in renewable energy and increased spending in electricity networks, made electricity the biggest area of capital investments," Varro said.

Electricity investment worldwide was $718 billion, lifted by higher spending in power grids which offset the fall in power generation investments.

"Investment in new renewables-based power capacity, at $297 billion, remained the largest area of electricity spending, despite falling back by 3 percent," the report said.

Although renewables investments was 3 percent lower than five years ago, capacity additions were 50 percent higher and expected output from this capacity about 35 percent higher, thanks to the fall in unit costs and technology improvements in solar PV and wind generation,the IEA said.

Investments in coal-fired electricity plants fell sharply. Sanctioning of new coal power plants fell to the lowest level in nearly 15 years, reflecting concerns about local air pollution, and emergence of overcapacity and competition from renewables, notably in China. Coal investments, however, grew in India.

"Coal investment is coming to an end. At the very least, it is coming to a pause," Varro said.

The IEA report said energy efficiency investments continued to expand in 2016, reaching $231 billion, with most of it going to the building sector globally.

Spending on electricity networks and storage continued the steady rise of the past five years, reaching an all-time high of $277 billion in 2016, with 30 percent of the expansion driven by China’s spending in its distribution system, the report said.

China led the world in energy investments with 21 percent of global total share, the report said, driven by low-carbon electricity supply and networks projects.

Although oil and gas investments fell in the United States in 2016, its total energy investments rose 16 percent on the back of spending in renewables projects, the IEA report said.

Posted by: AGelbert

Emmanuel Macron, the new president of France and not yet 40 years old, is taking the first steps toward his stated goal of advancing his country’s commitment to the Paris climate change accords. Nicholas Hulot, Macron’s Ecological Transitions minister, told the French press this week that his country will impose a moratorium on new oil and gas exploration licenses.

Quote

“There will be no new exploration licenses for hydrocarbons, we will pass the law this autumn,” Hulot said.

Posted by: AGelbert

Book Preview: The Tesla Revolution — Why Big Oil Has Lost The Energy War

SNIPPET:

June 23rd, 2017 by Guest Contributor

Originally published on EV Annex.By Charles Morris

Everybody seems to be piling on the poor oil barons these days. Just as Tony Seba’s latest paper nmpredicting the doom of the industry is making the rounds, a new book explains their predicament from an even more Tesla-centric perspective.

The Tesla Revolution: Why Big Oil Has Lost the Energy War is by Rembrandt Koppelaar, a Senior Researcher at the Swiss Institute for Integrated Economic Research, and Willem Middelkoop, founder of the Commodity Diversity Fund.

It examines the disruptive combination of electric vehicles and renewable energy, both fields in which our favorite California company is dominant. It’s a scholarly volume, with plenty of facts and figures, as the following brief excerpts will show (via GreenBiz).

Posted by: AGelbert

We should also bear in mind one other thing that can be less than obvious but may play a large role in the overall picture. It is that a small loss of revenue can sometimes produce large financial losses, putting profits into negative territory. In a stressed company, this can end in complete collapse.

Posted by: AGelbert

Sweden’s largest pension fund, AP7, announced last week that it had divested all its investments in six separate companies that it says had violated the Paris Climate Agreement, including big name companies such as ExxonMobil, Gazprom, and TransCanada .

AP7 provides pensions to 3.5 million Swedish citizens, making it the country’s largest national pension fund. Last week, the group announced that it had divested itself from six companies it believed had violated the Paris Climate Agreement in different ways. Specifically, AP7 accused ExxonMobil, Westar, Southern Corp, and Entergy of fighting against climate legislation in the United States, Gazprom for exploring for oil in the Russian Arctic, and TransCanada for building large-scale pipelines across North America.

Posted by: AGelbert

In Latest Sign of Crude Glut, Ageing Supertankers Used to Store Unsold Oil

June 16, 2017 by Reuters

ReutersBy Keith Wallis and Henning Gloystein SINGAPORE, June 16 (Reuters) – Traders are increasingly storing oil in ageing supertankers in Southeast Asia as they grapple with a supply overhang that has left the system clogged with unneeded fuel despite an OPEC-led drive to cut production to prop up prices.

Around 10 very large crude carriers (VLCCs), all between 16 and 20 years old, have been chartered since the end of May to store crude for periods ranging from 30 days to around six months, brokers told Reuters. Each VLCC can carry 2 million barrels of oil.

These vessels are in addition to around 30 supertankers used for long-term storage around Singapore and Linggi, off the West coast of peninsula Malaysia.

One of the main drivers for storing oil in tankers is that crude prices for immediate delivery are cheaper than for future sale, a market condition known as contango.

Brent crude futures, the international benchmark for oil prices, have fallen by 13 percent since late May, to around $47 per barrel. Brent for delivery at the end of 2017 is $1.5 per barrel more expensive.

“Floating storage does seem … viable assuming time charter rates of under $20,000 per day,” said Rachel Yew, oil and tanker market analyst at Oceanfreightexchange.

Current rates to charter a five-year-old 300,000 DWT for one year are $27,000 per day, according to shipping services firm Clarkson. Rates for VLCCs at least a decade-old are much cheaper.

“It makes a lot of sense for a trader to pay $16,000-$19,000 per day to take an older VLCC for 30-90 days to store oil,” said a Singapore-based supertanker broker, asking not to be identified.

The festering supply glut comes even as the Organization of the Petroleum Exporting Countries (OPEC) pushes to withhold production until the end of the first quarter of 2018.

A shortage of spare onshore storage in China, as well as an expectation that new Chinese crude import quotas for independent refineries will be announced soon, are also playing a role in putting crude into tanker storage in Southeast Asia.

“Once China’s quota are released, you want to have oil close to China. Because onshore storage there is pretty full, the next easiest location is around Singapore and Malaysia,” said one trader.

“This expectation of new Chinese orders also helps explain why future crude is more expensive than current crude. That’s why we store it for later sale,” he added.

Posted by: AGelbert

India cancels plans for huge coal power station —because solar energy is getting so cheap

LAST UPDATED ON MAY 29TH, 2017 AT 9:36 PM BY MIHAI ANDREI

Good news from India, as authorities report the scrapping of plans for nearly 14 gigawatts of coal-fired power stations.Indian energy

India is the world’s second most populous country, and one of the fastest growing economies. Several projections put future India as the world’s most populous country and the world’s third largest economy by 2050, so if we are to truly combat global warming and achieve a sustainable future for the planet, India will be a key player.

Looking at India’s development over the past few decades has been quite a rollercoaster. With poverty running rampant through many parts of the country and a severe lack of infrastructure in the rural areas, it was surprising and inspiring to see the country’s ambitions in terms of renewable energy. In recent years, India has become one of the best markets for solar energy, with more and more panels being installed every day.

There are over 300 million people currently living in India with no access to electricity, most of which live in rugged, inaccessible areas. Establishing a conventional grid would be incredibly costly, but this is the beauty of solar power: it doesn’t really require a conventional grid. Aside from being renewable, clean, and cheap, solar can work with a local or separated grid.

Still, despite India investing massively in renewable energy (mostly solar), they’ve also developed a backup plan — also committing to fossil fuel energy, especially coal; pretty much the dirtiest source of energy. Last year, India announced plans to build more than 300 gigawatts (GW) of new coal capacity by 2030, even though that was found to be almost entirely unnecessary and wasteful, as over 90% of that new capacity would remain idle. Basically, the Indian government remained determined to not put all their eggs in one basket and invest both in renewable and fossil fuel energy.

Coal of the past

In 2017, things changed a bit. The Indian state of Gujarat announced the cancellation of a proposed 4 GW coal ultra-mega power project, citing a surplus of energy in the area and a desire to continue moving away from coal. That was just the start.

Now, in total, 13.7GW of planned coal power projects have been canceled this month alone, which is quite a figure.

Analyst Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis (IEEFA) said that tariffs have dropped so much in India that a tipping point has been reached: solar energy is now cheaper than coal.

“Measures taken by the Indian Government to improve energy efficiency coupled with ambitious renewable energy targets and the plummeting cost of solar has had an impact on existing as well as proposed coal fired power plants, rendering an increasing number as financially unviable.”

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“India’s solar tariffs have literally been free falling in recent months,” he added.It’s a positive prospect for India, which could trigger a chain reaction elsewhere in the world.

Posted by: AGelbert

Wind & Solar Are Already Cheaper Than Coal & Gas, So Let’s Get On With It

May 28th, 2017 by Guest Contributor '

SNIPPET:

Originally published on RenewEconomy.By Sophie Vorrath

New wind and solar energy generation is already cheaper – on average – than the cost of existing coal or gas power on Australia’s National Electricity Market.

We’ve reported it, and Bloomberg New Energy Finance foreshadowed it at the recent Australian Solar Council Solar and Energy Storage conference in Melbourne (did we mention battery storage..?).

And this week, the CEO of the Australian Renewable Energy Agency delivered the news to the federal government’s Senate Environment and Communications Legislation Committee, with the moment captured on video.